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Sunday, July 21, 2013

Notes about terminology

There are many terms that can be used to express the same concept. Here we'll list some terms we use for the development of DELT,'s underlying software, and for the documentation on this blog.

If you spot any kind of errors, please contact us by adding a comment below. Thank you.

Accounting and Bookkeeping

Accounting concerns the production of financial statements at the end of the reporting period (generally, the fiscal year). It has much to do with the adjusting journal entries concerning accruals, deferrals, depreciation, bad debt expenses, etc.
Bookkeeping is the recording of financial transactions, like purchases, sales, receipts and payments.
On you can practice both accounting and bookkeeping.

Chart of Accounts

The Chart of Accounts is the list of accounts that you can use for your firm's accounting. Each account has a name, a position (Balance Sheet or Income Statement), an ordinary outstanding balance. If you chose more than one language for the accounts of your firm, you can set more than one name, one for each language. This way, you can obtain the Financial Statements and the Trial Balance in different languages. If you fork the Standard Firm, you get a complete Chart of Accounts, open to improvements.


We call "firm" the collection of accounting data concerning a business, a corporation, a company, etc. for one reporting period.
This is a tool for teachers to prepare and for students to make exercises. If your exercise concerns a company called Foo Inc. for the year 2013, go create a firm called "Foo Inc. 2013". If the exercise continues for two years for the same company, you can create a second firm called "Foo Inc. 2014" (probably you want to fork the one previously created, so that you can use exactly the same chart of accounts).


You can create a firm by copying the contents (the chart of accounts, and the journal entries) from another firm. We call this action a "fork", because the link between the firm being copied and the new firm is maintained, and an edit in the source can be pulled from the target, like it happens in the software development world.
Suppose you have Firm1 and "fork" it as Firm2. Then you add an account in the Chart of Accounts of Firm1. Firm2 does not have that account, but you can "pull" the updates from Firm1, if you want to do so.

Journal Entry

A "journal entry" is the recording of a business transaction (such as a payment) in the General Journal. It has a date, a description (which describes what actually is being recorded, and is sometimes called "explanation"), and an array of lines, each of which specifies an account and a debit or credit account. The  journal entry must balance.


The "ledger" is the list of postings concerning a specific account. In manual bookkeeping exercises, the ledger has the shape of a big T, with debits on the left side and credits on the right side, and therefore ledger accounts are often referred to as T-Accounts. When you look at a ledger using, you won't find the T shape, but a set of lines with all the debits and the credits concerning that account, in chronological order.
In manual bookkeeping, the word "ledger", or "general ledger", is sometimes referred not to the single account, but to the book containing all the T-accounts. In we use the term as it refers to the single account.


We call "posting" the single line of a journal entry. In the old times of manual bookkeeping, the action of posting was referred to the act of copying the amount from a single line of the journal entry to the specified account, in the general ledger. When using software, data are not actually copied from the journal to the ledger.


As Wikipedia puts it, a "slug" is the part of a URL which identifies a page using human-readable keywords. In, every firm has an associated "slug", that can be used to refer to the firm in URLs, like, for example,, where the slug is "sample-exercise-01". If you want your firm to be easily used by others, use an easy-to-type slug. If you want to keep it somehow "secret", you can generate a random one. Please note that all firms are "public", since their contents (journal and statements) are visible by everyone, even without being logged in.


A "transaction" is the event that happened and must be recorded. It might be a payment, a purchase, the selling of goods, etc. With some software, transactions are automatically converted into double entry journal entries. Being a place where to learn to do things, this never happens in, where you must record every transaction by hand.

VAT (Value Added Tax)

In the Chart of Accounts provided with the Standard Firm, you'll find accounts like "VAT Payable" and "VAT Receivable". VAT (Value Added Tax) is a form of consumption tax used in the European Union and in many other countries, sometimes with a localized name (amongst them, you'll find China, India, Mexico, Australia, Canada, Brazil). You can of course customize the Chart of Accounts according to your needs.

Wednesday, July 17, 2013

Sample exercise 03

In this third sample exercise, we are going to illustrate some other features of The example is taken, with authorization, from We won't get into details about the why's of things (that you'll find on their website, with a deep explanation), but we'll concentrate on how to do this kind of exercises with a virtual firm that you "own" on

Let's begin. We are given the following preliminary balance sheet, which reports the account balances prior to any adjusting entries:
Preliminary Balance Sheet - courtesy
To start the exercise, you need to:
  1. login to
  2. go to the Bookkeeping and Accountancy page
  3. click on "Fork an existing firm" menu item
  4. click on "Standard Firm"
  5. choose to duplicate the Chart of Accounts
  6. click on the "Yes, fork this firm" button
  7. set a name and a description for the firm
  8. click on the "Save" button, and you are done.
After firm creation, you can click on the "Journal" menu item, and then choose to create a new "journal post" (aka journal entry, aka transaction). You will be shown a form like the following:

Instead of writing the single lines here, you can:
1. switch to raw input mode

2. load all accounts from the chart of accounts

3. copy the account names to a spreadsheet (first select the whole text of the box, then copy, then paste on the spreadsheet)

4. find the accounts in the spreadsheet, and write the amounts of debits and credits (if you don't find an account with exactly the same name, choose a one that has the same meaning and don't worry: you can edit the name later; but if you really don't find an account, just add a line with the missing name with an exclamation mark at the end, like we did here for Prepaid insurance); pay attention to the fact that the totals of debits and credits must balance; you can, if you want, delete the lines of unused accounts

5. copy the selection from the spreadsheet back to the web form, and click on the "Switch to text fields mode" icon

6. since you probably want the accounts with the debits first, just click on the "Sort postings, debits first" icon

7. save the journal entry, and you are done. Easier done than said, isn't it?
If you look at the journal now, it looks ok. We used Supplies Inventory instead of Supplies, Bank Checking Account instead of Cash, Bills Payable instead of Notes Payable, Payments on Account from Customers instead of Unearned Revenues, Employment Expenses Payable instead of Wages Payable, and Common Stock instead of Mary Smith, Capital.

If this is fine for you, well. Otherwise, you can edit the Chart of Accounts with the names that you prefer.  The Trial Balance looks like this now:

As you can see, the Prepaid Insurance account has been added on the fly, and you find it marked in yellow at the bottom of the table. To fix the problem, you just have to assign a correct code to the account. Since you already have a Prepaid Expenses account, you can choose to add another account as its sibling with a code like This way, the account will be a child of the Accrued Income and Prepaid Expenses account, which has code 00.03.06.

Other choices would be possible. For instance, you can make Prepaid Insurance a child of Prepaid Expense, by entering a code like This way, Prepaid Expense would not be usable as such, because it would have some children.

It's up to you how to organize your Chart of Accounts, and which names to give to the accounts themselves. Just consider that:

  • once you edited the Chart of Accounts of one firm, you can use it in other firms that are forked from it;
  • if you spot any problem in the Chart of Accounts provided for the system-provided Standard Firm, you can add a comment in this blog or drop us a message, and we'll try to fix it.

Edit the account names as you like. We only changed Common Stock to Mary Smith, Capital.

When you are done, you can start entering the journal entries of the example exercise provided by (We added an extra journal entry with some amounts for Income Statement accounts at the beginning.)

For each journal entry, you can click on the "Analyze the Transaction" icon, that shows a little explanation of what is going on. For instance, when you make the adjusting entry about bad debts valutation, you can see that you have an increase in Expense (Bad Debt Expense) and an increase in an Asset Contra Account (Allowance for Doubtful Debts).

When you want, you can have a look at the T-Account (called Ledger in the application) of any account. It's not actually T-shaped, but the meaning should be obvious anyway.

You can find the complete exercise in its public page, and you can fork the firm by using the slug "sample-exercise-03".

Friday, July 12, 2013

Explanation of journal entries (transaction analysis)

Since version 1.0.9, lets you have an explanation of the journal entry you are seeing.

You just need to click on the little "Analyze the transaction" icon:

A little portion of the page will open, and you will see comments like the following (click to enlarge):

Please note that this feature is still experimental. If you find errors, please contact us.

Wednesday, July 10, 2013

Any advice for our multilingual chart of accounts?

We just upgraded the code is based on, in order to show to non-authenticated users the chart of accounts of system-provided firms.

You can have a look at the chart of accounts of our "Standard Firm" at the URL Please note that some of the names of the accounts have to be checked, and we would love it if you can send advice and comments on how to improve it.

The names are currently expressed in US English and Italian. Of course, other languages can be added. Also, we are not sure about the differences between American English and British English, or other flavo(u)rs of English, for what concerns the names.

Position: BS (Balance Sheet) or IS (Income Statement)
Outstanding Balance: Dr. (Debit), Cr. (Credit), or "/" (unset) -- this is the "typical" outstanding balance that one could expect for an account (e.g., Debit for Cash, Credit for Sales, etc.), and it is used to show some warnings in case of doubtful journal entries...

Sunday, July 7, 2013

Multilingual chart of accounts

DELT version 1.0.7 is out, with a little enhancement in language management. It is now possible to choose which language(s) one wants to use for the names of accounts. In the "Edit" form of the firm, you now have the possibility to select the languages that you want to write the names of the accounts in.

If you have a multilingual chart of accounts, you can choose a different language anytime you want. When you edit an account, you must choose a name for the different languages.

Other languages can be easily added, so just leave a comment here or send a message if you want your one added on website.